The syllabus, topic by topic

All nine topics, and the ordinances and codes each of them turns on.

The HKSI Paper 1 syllabus: all nine topics and what each is worthPaper 1 runs on syllabus version 3.5. It has nine topics spread over 66 second-level headings, examined by 60 multiple-choice questions in 90 minutes.…
HKSI Paper 1 Topic 1: the regulatory overview, and why it is free marksTopic 1 covers who regulates what in Hong Kong: the SFC, the HKMA, the Insurance Authority and the MPFA, plus HKEX and the intermediaries themselves. …
Hong Kong's financial regulators, and who watches which marketFour bodies regulate Hong Kong finance: the SFC for securities, futures and asset management; the HKMA for banking; the Insurance Authority for insura…
What does the SFC actually do?The SFC is Hong Kong's independent statutory regulator for securities and futures. It licenses firms and individuals, authorises investment products a…
HKEX: what it owns, what it regulates, and what it does notHong Kong Exchanges and Clearing operates the market through subsidiaries: SEHK for securities, HKFE for futures, and HKSCC, SEOCH, HKCC and OTC Clear…
The types of financial intermediary in Hong Kong, and how each is regulatedHong Kong recognises four regulated statuses: licensed corporations, registered institutions, licensed representatives and responsible officers. Indiv…
HKSI Paper 1 Topic 2: Hong Kong law and the Companies OrdinanceTopic 2 has just two syllabus headings: an outline of Hong Kong's legal system, and the Companies Ordinance. It is the smallest topic on Paper 1. Lear…
Hong Kong's common law system, in the detail Paper 1 testsHong Kong is a common law jurisdiction whose legal system the Basic Law preserves. Law comes from the Basic Law, ordinances, subsidiary legislation, a…
The Companies Ordinance, in the slice HKSI Paper 1 examinesPaper 1 tests a narrow slice of the Companies Ordinance: the types of company, the three restrictions that make a company private, ordinary and specia…
HKSI Paper 1 Topic 3: the Securities and Futures OrdinanceTopic 3 covers the Securities and Futures Ordinance across 11 of the 66 syllabus headings, the largest block on Paper 1 and, on our estimate, about 8 …
The structure of the SFO: every Part, and what it governsThe Securities and Futures Ordinance is organised into Parts, each a self-contained regime: Part II the SFC, Part V licensing, Part VI client assets a…
Part V of the SFO: licensing and registrationPart V of the Securities and Futures Ordinance governs who may carry on a regulated activity in Hong Kong. It creates licensed corporations, registere…
Part VI of the SFO: capital, client assets, records and auditPart VI of the Securities and Futures Ordinance is the enabling framework for the SFC's rules on financial resources, client securities, client money,…
Part VII of the SFO: the statutory side of business conductPart VII of the Securities and Futures Ordinance holds the statutory business conduct obligations that apply to intermediaries and the SFC's power to …
Parts VIII to XI: supervision, discipline, intervention and appealsParts VIII to XI of the Ordinance are the enforcement chain. Part VIII gives the SFC its investigative powers, Part IX its disciplinary sanctions, Par…
The Investor Compensation Fund: what it covers and what it does notPart XII of the Ordinance creates the Investor Compensation Fund. It pays investors who lose money because a licensed intermediary or authorised insti…
Offers of investments: the Part IV authorisation regimePart IV of the Ordinance requires SFC authorisation before an advertisement, invitation or document offering securities or collective investment schem…
The OTC derivatives regime in the SFO, and how far it is examinablePart IIIA of the Ordinance brings over-the-counter derivative transactions into a reporting, clearing and record-keeping regime supported by rules mad…
HKSI Paper 1 Topic 4: licensing, registration and subsidiary legislationTopic 4 covers licensing and the subsidiary legislation made under the Ordinance across 10 of the 66 syllabus headings, and on our estimate about 14 o…
The thirteen regulated activities, Type 1 to Type 13Hong Kong has thirteen numbered regulated activity types, set out in a schedule to the Securities and Futures Ordinance. They run from Type 1 dealing …
SFC capital requirements: how the rule is built, and what changes itLicensed corporations must meet two capital tests: a minimum paid-up share capital and a minimum liquid capital. Both are set by the SFC's financial r…
Client securities and client money: the rules that protect the client's propertyThe SFC's client securities and client money rules require a licensed corporation to segregate client property from its own, hold client securities in…
Topic 5 of HKSI Paper 1: business conduct and client relationsTopic 5 covers the SFC Code of Conduct and the specialist codes sitting on top of it. Six syllabus headings, and on our estimated blueprint about 11 o…
The SFC Code of Conduct, explained for Paper 1 candidatesThe SFC Code of Conduct sets the standards expected of licensed and registered persons in Hong Kong. It is not subsidiary legislation, so breaching it…
Know your client requirements in Hong KongBefore providing services, an SFC-licensed firm must establish the client's identity, financial situation, investment experience and investment object…
The suitability obligation: when it bites and when it does notThe suitability obligation requires that where an SFC-licensed firm makes a recommendation or solicitation, the product must be reasonably suitable fo…
Client agreement requirements in Hong KongAn SFC-licensed firm must enter a written client agreement before providing services. It must identify the parties, state the firm's licence status an…
The Fund Manager Code of Conduct: the basics Paper 1 wantsThe Fund Manager Code of Conduct applies to SFC-licensed managers of collective investment schemes and discretionary accounts, typically Type 9 asset …
Topic 6 of HKSI Paper 1: business operations and practicesTopic 6 covers how a licensed firm must be run: the Management, Supervision and Internal Control Guidelines, anti-money laundering, electronic trading…
The Management, Supervision and Internal Control GuidelinesThe Management, Supervision and Internal Control Guidelines set out what the SFC expects of a licensed corporation's control environment. Senior manag…
Anti-money laundering requirements for SFC licenseesSFC licensees must apply customer due diligence, keep records, and monitor relationships on a risk-based basis under Hong Kong's anti-money laundering…
The Personal Data (Privacy) Ordinance for intermediariesThe Personal Data (Privacy) Ordinance binds every data user in Hong Kong, including SFC-licensed firms, through six data protection principles: collec…
Electronic trading and alternative liquidity poolsA firm that uses or provides an electronic trading system stays fully responsible for the orders it sends, whoever built the system. The SFC requires …
Topic 7 of HKSI Paper 1: participating in the Hong Kong exchangesTopic 7 covers how the Hong Kong market actually operates: HKEX and its subsidiaries, dealing in securities on SEHK, traded options, futures contracts…
Dealing in securities on SEHK: sessions, matching and settlementSecurities on SEHK trade through a pre-opening auction, continuous morning and afternoon sessions, and a closing auction. Continuous trading matches o…
Traded options on SEHK: the basics that get examinedA traded option on SEHK gives its buyer a right, not an obligation, to buy (call) or sell (put) the underlying at a set price. The buyer pays a premiu…
Dealing in futures contracts: margin, mark-to-market and closing outA futures contract binds both parties to a standardised transaction at a future date. Both post initial margin, positions are marked to market daily, …
Topic 8 of HKSI Paper 1: accessing public capitalTopic 8 covers how companies raise money from the Hong Kong public: the rules governing listing, other listed securities, takeovers and share buy-back…
Hong Kong Listing Rules: the basics for Paper 1The Listing Rules are made and enforced by the Stock Exchange of Hong Kong, not by the SFC, and they are contractual rather than statutory. A Main Boa…
The Takeovers Code and share buy-backs in Hong KongThe Codes on Takeovers and Mergers and Share Buy-backs are administered by the SFC and have no statutory force. They rest on equality of treatment: a …
SFC authorised products: what authorisation does and does not meanWhere a collective investment scheme or structured investment product is offered to the Hong Kong public, the product and its offering documents gener…
Topic 9 of HKSI Paper 1: market misconduct and improper tradingTopic 9 covers market misconduct under the Securities and Futures Ordinance, its consequences, unsolicited calls, improper trading practices and enfor…
The six types of market misconduct in Hong KongHong Kong recognises six types of market misconduct: insider dealing, false trading, price rigging, disclosure of information about prohibited transac…
Insider dealing and inside information in Hong KongInsider dealing in Hong Kong means dealing, or counselling another to deal, while connected with a corporation and in possession of information about …